This is a rush transcript from "Hannity & Colmes," June 11, 2008. This copy may not be in its final form and may be updated.

SEAN HANNITY, CO-HOST: And welcome to "Hannity & Colmes." We are following a developing story tonight.

Jim Johnson has resigned as the chairman of Senator Barack Obama's vice presidential vetting team. Now this comes after days after controversy following the revelation that Johnson had gotten preferential loans from the embattled mortgage company Countrywide.

The Obama campaign and the senator himself had tried to defend Johnson over the past couple of days, but Johnson said in a statement today that he didn ' t want to distract from Obama's historic campaign.

Joining us now with more on this developing story, former New York city mayor, former presidential candidate, Rudy Giuliani.

How are you?

RUDY GIULIANI, FORMER NYC MAYOR: How are you, Sean? Good to see you.

Video: Watch Sean and Alan's interview with Rudy Giuliani

HANNITY: You look tan, rested. You've been playing a little golf lately or.

GIULIANI: Well, you got a chance to do that when you're not in the middle of an intense campaign like I was last year at this time.

HANNITY: Well, but you've also been out campaigning a lot.

GIULIANI: I have. I was with John yesterday. He had a successful visit here in New York and raised some money and I think he's in very good spirits and in very — and in a very good position.

HANNITY: I wonder if Rudy Giuliani might get a call to get vetted for VP? And.

GIULIANI: Well, I don't seek anything. I really don't.

HANNITY: Right.

GIULIANI: I left my campaign and endorsed John because I felt he was the right person to be president of the United States.

HANNITY: Right.

GIULIANI: And I think it's — you know for people who look at the world the way I do, this is an enormously important choice, John McCain. I think it'll be a big difference between him and Barack Obama.

HANNITY: One of the things — Barack Obama said himself, he's politician like we've never seen before.

GIULIANI: Very dangerous to ever do that because then you get — then you get — you know, when you do the holier-than-thou thing.

HANNITY: Yes.

GIULIANI: . this is the kind of thing that happen to you, like happened with Johnson. I mean, you're the new politics. You're going to be different, everything's going to be different, and this is a big mistake.

I mean this is the guy who was going to help him select his vice- president in this new era, and obviously he's got serious enough problems that he had to drop out.

HANNITY: I find this amazing. You know he'll say about either Tony Rezko or Jeremiah Wright, this is not the person I known for 20 years. Same with Father Pfleger.

GIULIANI: When you add up a number of those, it becomes a question of — is this really a new politics or is this old style politics?

HANNITY: And the other excuse is, well, what am I supposed to do? I thought this was a pretty funny line. He's getting agitated with the media. What am I, supposed to vet the vetters? And this is a game that's being played. It seems like he doesn't want any vetting going on. It's like he's got — I said this last night, it's like he's got 10,000 press secretaries.

GIULIANI: I actually think the mistake that was made was to defend it.

HANNITY: Yes.

GIULIANI: Mistakes like this are going to get made. When they get made, you have to deal with it immediately.

HANNITY: All right. What do you think for — I think there's a balancing act for Senator McCain in this campaign, and if you were running — I've watched you up close and personal, we've been friends for a long time, and you've always taken the tact that if somebody attacks you, you're going right at them, you don't back down, you're a fierce political opponent.

I think I'm pretty.

GIULIANI: Right.

HANNITY: Some of the best press conferences where Rudy Giuliani and the New York City press. I mean they're classic. We should go back and air those things.

GIULIANI: They were fine. They were fine.

HANNITY: Because it was contentious and you were always honest.

GIULIANI: Right. Right.

HANNITY: But Senator McCain has shown a little bit of reluctance in terms of going after some of the controversies of Senator Obama. As he balances the — you know should he run on ideas versus going after the weaknesses that he's not really an agent of change, that he's a typical, quintessential politician, where would you balance it?

GIULIANI: I think — first of all, it's different being a mayor and being a presidential candidate, and I think that you're going to find that in both cases Senator Obama and Senator McCain — a lot of the attacking is going to be done by surrogates. And they're going to — well, I mean.

HANNITY: People like me.

GIULIANI: Right. All of the attacking.

ALAN COLMES, CO-HOST: You're a McCain surrogate.

HANNITY: No, no, I'm the head of.

(CROSSTALK)

GIULIANI: Look, a lot of these points are valid points. We have to examine people's experience. You have to examine their judgment and all these things. But I mean you don't want a presidential candidate spending too much time on that. You want a presidential candidate — I think, either party would say this — you want them focusing on the future.

HANNITY: All right.

GIULIANI: . what they can do for the future. You want them on a higher plane.

HANNITY: Let me ask you this, because I really do not believe in my heart of hearts — so I look at this camera — I do not think Barack Obama has been honest, and I do not think he's made responsible decisions in his career, and I think we've been the victim of a bit of a propaganda marketing campaign, and I don't think we know who the real Barack Obama is.

Do you agree with me?

GIULIANI: We're going to find out. I mean that's.

COLMES: He has a chance to define himself now.

GIULIANI: The one thing that you can be sure of in an American presidential campaign is everything is going to be reviewed and everything's going to be looked at. We're going to find out. My big issue with Barack Obama is — and the one that I'm sure of — I don't have to worry about, you know, what's going to come out or what isn't — I don't think he has the experience to do the job.

COLMES: Mr. Mayor, let me ask.

GIULIANI: And I think that is patently clear.

COLMES: The — you know, this idea of who he chose for his vetting committee to get for VP. And yet John McCain has had three or four or five different lobbyists had to resign because he said I'm not going to have lobbyists. He sets himself up as a holier-than-thou, purer-than-thou person, who's not going to have any lobbyist in this campaign? And they've had to have three or four people resigned. So he's got.

GIULIANI: But they attacked him bitterly for that. The Democrats attacked John McCain.

COLMES: Because he set himself up as someone who's not going to get.

(CROSSTALK)

GIULIANI: And he did get rid of them, and they weren't in a position to select his next vice president. And I think the issue — I think at least a lot of us Republicans think that Barack Obama is treated in a special way. If there are issues about people around John McCain, they get exposed, they're big, big issues.

COLMES: They're going after Obama like nothing on these days. They're going after him on everything, everybody he knows, everybody he ever talked to, if it was his dry cleaners, dentists. I mean everybody he's ever.

GIULIANI: Well, maybe that is going to happen now. But it was happening — I think Hillary Clinton was complaining about that.

COLMES: Well, if you were the candidate, if you were the nominee, you had to defend yourself against...

(CROSSTALK)

GIULIANI: Absolutely.

COLMES: You had to defend yourself against people — if you were the nominee now, you'd be fighting the same kind of battles about people you were associated with.

GIULIANI: Of course, I would. Every candidate does. The reason it becomes more of an issue in Senator Obama's case is — and I think a legitimate issue is lack of experience. He has — does not have in my view the kind of experience you need to be president of the United States. He's been in the Senate a very short period of time, he was a state legislator before that, never run a company, never run a government, never run a government agency, has no executive experience.

COLMES: George W. Bush was a — one and half term governor, gubernatorial weak state, failed companies, lost a lot of money and failed businesses.

GIULIANI: He.

COLMES: Did not have a lot of political experience, and yet.

GIULIANI: He's the governor of the second or third largest state in the country.

COLMES: And gubernatorial weak state, executively.

GIULIANI: And one of the most complex states in which to get elected and to govern, and Ronald Reagan was a governor for two terms before he was president of the United States, and Gerald Ford was in Congress.

COLMES: Before, he was in Congress. But Reagan and Bush did not have a lot of foreign policy experience. Bush famously could not answer (INAUDIBLE) where Afghanistan was, and a bunch of other things, knew very little about foreign policy.

GIULIANI: But he has executive — the single most important thing that a president has to be able to do is make decisions.

COLMES: Right.

GIULIANI: Be able to know how to run a complex organization. Most people that run for president have that background and experience. So I know you support Barack and — but you've got to admit, this is a painfully small amount of experience for a job.

COLMES: I think people.

GIULIANI: . with any corporation in America hire someone with so little experience to run a complex corporation.

COLMES: Given the disgust people have with both the president — 28 percent approval rating — and with Congress, both parties of Congress, and people do wanting there the word "change," don't you think there's an advantage of not being part of the inside the beltway mentality? Being someone who represent somebody new and fresh and different?

GIULIANI: Yes, there is. Absolutely, but then it doesn't detract from the fact that you need experience to do the job. That experience isn't going to come just because you say the word "change." And I took this up in the campaign because Senator Obama would say this so often.

This is like a slogan. It isn't a reality. Change, but in what direction? How are you going to change things? Are you going to change things by raising taxes?

Well, there are people who don't want you to change it and raise taxes.

COLMES: He's not going to raise taxes. He's — he's talking about lowering taxes for 95 percent of Americans.

(CROSSTALK)

GIULIANI: It's like a total fraud. The idea that the Bush tax cuts are going to expire.

COLMES: Only for the top 2 percent.

GIULIANI: But that's — that'll be a significant raise in taxes.

COLMES: He's going to lower them for most middle class Americans.

GIULIANI: If the Bush tax cuts are expired, and the tax cuts go into effect and are done away with, that's a major tax increase, and it's going to happen with capital gains taxes, it's going to happen with dividend taxes, how many people's pensions are invested in the market?

COLMES: We're going to pick it up right there.

GIULIANI: And how much of an impact is that going to have on poor people or middle class people.

COLMES: We're going to pick it up in just a moment with Mayor Giuliani.

HANNITY: See what I have to deal with every night. You see what I've got to deal with?

COLMES: You poor baby. Stop whining.

GIULIANI: It's a choice you made.

(CROSSTALK)

COLMES: Sorry your career isn't going to well, Hannity.

Coming up former presidential candidate and big Obama supporter Senator John Kerry says when it comes to Iraq, John McCain has no clue what's going on. And more with Rudy Giuliani as he responds to the latest salvo between McCain and Obama. And we'll hear from Karl Rove on why he thinks Obama's latest lead in the poll means very little. Coming up.

COMMERCIAL BREAK)

COLMES: Early this morning, during an Obama conference call Senator John Kerry attacked Senator John McCain for being, quote, "confused" on his Middle East policy.

Let's listen.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), OBAMA SUPPORTER: He confuses who Iran is training. He confuses what the makeup of al Qaeda is. He confuses the history going back to — you know, 682 of what has happened between Sunni and Shia.

(END VIDEO CLIP)

COLMES: And when a reporter suggested that those remarks might be seen as a shot at McCain's age, Kerry responded with the following.

(BEGIN VIDEO CLIP)

KERRY: I think it's unfair and even a little bit ridiculous to assume that because you use a word that's used every day in American life about people's policies and you apply it to John McCain that you jump to the conclusion that it somehow refers to a question of age.

(END VIDEO CLIP)

COLMES: We now continue with Rudy Giuliani. I don't want to attack him for his age. I'd like to be that age one day. We don't like to be there.

GIULIANI: I don't think that attack will get you very far. The guy is so vital and he's so.

COLMES: I agree with that.

GIULIANI: . so energetic. I don't think that's.

COLMES: But he has shown confusion between Shiites and Sunnis, between who's training al Qaeda in Iraq. He had to be coached by Lieberman at one point after a couple of similar mistakes to get the answer.

GIULIANI: I mean this is the guy who is, you know, voted for the troops before he voted against the troops and got really confused on that vote. And he had about eight different positions on Iraq.

Back in that campaign, I used to keep a chart of John Kerry's position.

COLMES: McCain.

GIULIANI: It was so confusing, you needed a computer to keep with that.

COLMES: McCain was against Bush tax cuts before he was for them. You're going to have a list of — he was for — against torture before he was for it. He was — I'm going to have a list the things McCain's have been changing.

GIULIANI: If somebody's going to make that attack, it can't be somebody like John Kerry.

COLMES: But the point is McCain — wait a minute. Would you admit — would you acknowledge that John McCain is not the same politician now he was in 2000 and that he has gone more to the right and changed his position on a number of things to comfort with conservatives.

GIULIANI: I would say that John McCain has changed his position on some things, but I know John. None of it comes about — this is a guy who is incapable of pandering.

John changed his position on tax cuts because he saw they worked. I supported the Bush tax cuts when they happened, and I supported the extension of the tax cuts. But, you know, nobody knows at the time you support them whether they're going to work or not.

I think what the Bush tax cuts demonstrated to people who were fair- minded about it is they made a mistake in voting against them because the darn things worked, and they stimulated our economy.

COLMES: But the economy is (INAUDIBLE). By the way, would you have an interest in the vice presidency?

GIULIANI: I don't think you have an interest in the vice-presidency. The presidential candidate decides on the vice president. I want John McCain to pick the person.

COLMES: You're not going to pull a Strickland and say if elected I will not.

GIULIANI: If he asked my advice, and he gave me three names.

COLMES: Yes.

GIULIANI: . and I thought A was the one that would help him win the best, I would rather see A be the person.

COLMES: What do you think of Bloomberg, your successor.

(CROSSTALK)

HANNITY: I want to know who A is?

GIULIANI: That's why I used A rather than.

(CROSSTALK)

GIULIANI: I have a tremendous interest as an American in John McCain getting elected.

COLMES: What do you think of the possibility.

GIULIANI: And I want the right vice presidential candidate. Not me, that's absurd.

COLMES: Mr. Mayor, what do you think the possibility of Michael Bloomberg, your successor, as a vice president?

GIULIANI: On which ticket?

COLMES: Either one. That's a good question. Either ticket.

GIULIANI: Mike is a terrific mayor. The change in parties ends up being an issue with either party because.

COLMES: Yes.

GIULIANI: . the loyalists in the party are going to have trouble with it, but I mean that's something that either one of the candidates.

COLMES: Would he be good?

HANNITY: Hang on a second. I want to go back to A, B and C.

COLMES: It might be A.

GIULIANI: Michael has what Barack Obama lacks. And you can go look at his executive decisions and decides whether he like them or not. But the man has experience.

HANNITY: Back to A, B and C one second. And so you recommended your top three who you would advice that he pick for vice president.

GIULIANI: I'm not going to do it on television.

COLMES: Why not?

GIULIANI: If it (INAUDIBLE), I'd do it personally. It could be the kiss of death for people.

(CROSSTALK)

HANNITY: All right. By the way, you know, I do think it's funny John Kerry's comments. You — voted the 87 billion. But it was Barack Obama who did say we had 57 states, didn't know the difference between an inhaler and a breathalyzer, and I did — I don't think he knew the difference between Memorial Day and Veterans Day, so he did have his own share of moments there on the campaign trail.

GIULIANI: These mistakes are going to be made, and they're — we're going to seize on them and honestly, they're ultimately not going to be very important. It's going to come down to what the American people want, and do they buy the change argument that Barack is using? Or do they say we don't want a change in that direction? All we want is somebody with more experience.

And are they — are — and I think John's best argument is that he has the experience. He's a proven leader.

HANNITY: Right. We know he thinks that Iran and Venezuela and Cuba are tiny countries that are not a serious threat. He actually said that. We know he wants to — he wanted the windfall profit tax on oil companies, wanted to raise taxes on oil and — and natural gas. Wants an income tax increase, double the capital gains tax, nationalize health care.

GIULIANI: This idea that he's not going to tax the poor is such a phony argument. What you just said would do tremendous damage to the poor because each one of these industries that you're talking about exact a regressive tax on the poor because they have to buy those products.

HANNITY: Exactly.

GIULIANI: With the — let's say the tax on gasoline or the price of gasoline, it's going to — the price of gasoline is going to hurt a poor person a lot more than it's going to hurt a rich person because it's going to be a much larger percentage of whatever little money they have.

HANNITY: But is this — do you agree with me, oil, the price of gasoline, and I'm getting a lot of email.

GIULIANI: Right.

HANNITY: That this is a defining issue, and Republicans have got to be the party of energy independence.

GIULIANI: Absolutely, the president has to be — we're going to elect a president — I think one of the major issues will be the one that we believe can do the best job of making us energy independent, and both of them — and here's an issue on which they don't disagree. Both of them agree on climate change.

HANNITY: All right.

GIULIANI: John McCain has been.

COLMES: A lot of conservatives don't, by the way.

GIULIANI: He does. But the issue is how do you go about that? And how you can honestly deal with climate change if you believe it without nuclear power makes no sense. You have to have nuclear power.

HANNITY: Mr. Mayor, good to see you.

GIULIANI: Thank you.

HANNITY: Thank you for being with us.

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